Across the UK, everyone is talking about the four-day workweek. Between June and December 2022, 61 businesses took part in a three-month pilot of a four-day work week. The results are now in.
Of the 61 participants, a total of 56 have selected to extend the four-day week trial while about 18 have chosen to adopt the four-day week on a permanent basis.
While the switch for some departments will be easier than others, for the CFO there are a number of challenges the four-day week poses their day-to-day activities.
Among them, reduced productivity, the ability to forecast (which could have an impact on revenue, profits and other financial metrics), the costs associated with reducing the working week as well as unpredictable workloads.
Branch Road, a UK-based marketing and communications agency, successfully piloted a four-day working week. The results were overwhelmingly positive, with individual productivity increasing and employees delivering in four days what they typically delivered in five. Their pilot also showed a four-day week can enhance employee well-being, improve retention rates, and improve results for clients.
“What prompted this [pilot] is that as a business, we have to consider the additional supply chain costs that we face, the supply chain problems that you might come across as well, and then you have this broad narrative that is playing out, which is the global threat of recession as well,” Branch Road’s founder and CEO, Simon Cliffe, told the CFO.
“How is that going to impact our clients? How are they going to react and cope? That always goes through our minds,” he says.
An adaptable finance function
As part of the pilot, Branch Road’s finance function had to adapt to the four-day work week and work on a rotational schedule, with a full team available on Tuesdays, Wednesdays, and Thursdays and lighter coverage on Mondays and Fridays.
The team also adjusted processes, updated contracts, and streamlined accounting procedures to maximise the benefits of the new schedule.
“We shifted our finance function so the bulk of the work, calls, cash flows, invoicing, and anything really takes place in the middle of the week on Tuesdays, Wednesdays, and Thursdays,” explains Cliffe.
“Those three days we have a full finance team online, Mondays and Fridays are the lighter days typically used for end of week reporting, forecasting, chasing up any overdue, payments, responding to last minute finance requests, and data analysis.”
While there were some concerns around cash flow and productivity, the pilot ultimately showed the four-day work week had little impact on cash flow, and that employees were more focused and efficient in their work.
“The thing I like about finance people is that they work with black and white. If they feel that there is a risk with working four days, they just would not do it,” says Cliffe, explaining that the finance function adapted in the same way the accounts-based team did.
Added value equals growth opportunity
For Branch Road, the success of the four-day work week has led to a more disciplined approach to mining data, says Cliffe, whose data-driven approach to making decisions meant informing suppliers and contractors, who are mostly creatives and filmmakers, of the company’s current focus.
“We spent time, working with our suppliers and contractors, explaining what we were doing, and revising very clear guidelines around payment terms, invoice schedules, and payment dates, saying there are no more excuses, and this is our focus, and you have to get it right,” he explains. “We are now a lot more disciplined about mining our intel, how we mine our own data, and we are seeing the fruits of that already.”
The change in approach, Cliffe says, has allowed Branch Road’s teams to “dig” into projects to provide more profit. He says they are now able to see trends and how various budgets are being spent across the year.
Branch Road has not been the only business to benefit. Data from the UK’s pilot showed revenue increased by an average of 1.4% over the study period, according to data from 23 organisations that provided it.
Four-day work week key to retention
Like most businesses battling the current economic climate, for Branch Road, maintaining a strong talent pool is critical to its success. The agency has a specific brand personality that must be reflected in every hire, Cliffe says adding the four-day work week has proven to be a solution to this challenge.
Cliffe explained that current staff members and potential employees were in pursuit of flexibility and work-life balance.
“If you are looking to retain staff, it’s a dog eat dog out there when it comes to retention, someone has to come and wave £10 000 extra and someone is likely to leave. It’s much harder if someone is working a four day week, people try to poach our staff all the time and they are honest enough to come back and tell us and we have found that people say if you can offer a four day week, and increase my wages and keep the same spirit that branch road has absolutely I’ll consider it but that four day week is a real key for retaining talent. If you want to increase people’s focus and increase productivity, go to a four-day work week,” says Cliffe
CFOs see a range talent issues as the most critical risks for their organisations over the next 12 months, even amid an uncertain economy, inflationary conditions, continued supply chain challenges, geopolitical shifts, and ongoing concerns regarding cyber threats.
The four-day working week, as Cliffe suggests, can provide staff with increased flexibility and ultimately have a knock-on impact on morale – shorter working weeks likely result in more enjoyable working environments.
While implementing a four-day work week may require some adjustments to existing processes and schedules, the benefits can far outweigh any initial concerns. As Cliffe suggests, businesses that fail to explore this trend risk falling behind the curve. The four-day work week may very well be the next big thing, and the time to explore it is now.
“By 2030 most people are going to be doing this, if you are exploring the concept of a four-day week in years to come, you have missed the boat. We built our business on being hybrid and the fact that we knew that people won’t want to come to the office five days a week and this was years ago before the pandemic and everyone is saying you must be hybrid, you are too late. You should be doing this, otherwise you’re going to miss the boat,” says Cliffe.
The four-day work week is a trend that is gaining traction across various industries, and the finance function is no exception. Branch Road’s successful pilot of the four-day work week has shown that with some adjustments and a disciplined approach to data and workflow, the finance function can not only adapt to the new schedule but also see improvements in productivity, employee well-being, and retention rates.
CFOs and finance directors who are willing to explore this trend may find that the benefits of a shorter workweek far outweigh the initial challenges and risks, ultimately leading to a more engaged, efficient, and profitable finance function.
